GOP’s double whammy against the middle class

Editor’s Note: Timothy Jost is an emeritus professor of law at Washington and Lee University. The opinions expressed in this commentary are solely those of the author.

Republicans in Congress are rushing headlong toward voting for one of the biggest tax cuts in American history, with bills slashing taxes for corporations and the wealthiest Americans.

Along the way, however, they hit a speed bump. The tax legislation rules prohibit them from increasing the deficit by more than $1.5 trillion. That limit would keep them from, for example, permanently cutting corporate taxes.

So Senate Republicans found a way to add another $318 billion to their tax cuts, and it is diabolical in its genius: Kill Obamacare’s mandate requiring people to obtain health insurance.Such a repeal would increase the number of uninsured by 13 million and raise premiums for everyone in the individual market.And it would also allow congressional Republicans to do something they could not do all summer – deal a major blow to Obamacare.

The individual mandate is one of the act’s least popular provisions. But it is there for a reason. Insurance markets cannot work if they only cover the sick. Healthy people – most of us, most of the time – must also pay into insurance. That’s important, because healthy people don’t all stay healthy forever. And when they get sick or injured, and they don’t have insurance, disaster looms. They may get emergency care, but they may also end up deeply in debt, with the rest of us paying for much of their costs.

Those who lack insurance also don’t get the preventive care that might have caught heart problems or cancer early, when treatment is more effective and much less expensive.

Massachusetts was the first state to make health reform work. Building on a proposal put forward by a conservative think tank, its Democratic Legislature and Republican governor enacted an individual responsibility requirement in 2006. By making healthy residents responsible for buying coverage, Massachusetts created an insurance risk pool that could cover people with pre-existing conditions as well. In 2010, the Affordable Care Act copied the Massachusetts experiment.

According to the Congressional Budget Office, repealing the individual mandate would increase individual insurance premiums by 10%. This would be on top of dramatic premium increases insurers have just imposed because the Trump administration stopped reimbursing them for legally required cost-sharing reductions. As soon as the mandate repeal goes into effect in 2019, the CBO projects, 4 million Americans would drop coverage, many of them because of the increased premiums. Within a decade, 13 million Americans would be uninsured, it said.

The savings from repealing the mandate would be entirely due to Americans losing health insurance. And many of them would be people with pre-existing conditions who could no longer afford the higher premiums. There is a reason the nation’s doctors and hospitals, and patients and consumers are speaking up against repeal.

Republicans claim that most of those who pay the individual mandate penalty have incomes below $50,000. This is in part a testimony to the mandate’s success – most Americans who can truly afford coverage are now insured. But the mandate has a number of exceptions for lower-income individuals – no one whose income is too low to file taxes or who cannot find affordable insurance has to pay the penalty.

Moreover, more than half of the uninsured eligible for an Affordable Care Act subsidy can get coverage for free and 70% can find policies that cost less than the individual responsibility tax. Lower-income Americans can find free or low-cost coverage and should be responsible for being insured.

Republicans also assert that the 13 million who would become uninsured do not want coverage. Many, however, will drop coverage, not because they don’t want it, but rather because the repeal-caused premium increases will make coverage unaffordable.

Without the mandate requirement, people who would have been found Medicaid eligible by the marketplace may assume that insurance is unaffordable and not apply. Others will decide to skip the hassle of applying now, believing they can always get Medicaid coverage if they end up in the hospital. But in the meantime they – and their children – will forgo preventive and primary care.

All summer long Americans spoke up against Republican Obamacare repeal plans. We must speak up again against this last-minute effort to cut the Affordable Care Act’s heart out. And one more thing – how are Republicans planning to pay for that $1.5 trillion deficit? The most likely way: cut Medicare and Medicaid. You may not lose your own coverage this time, but they will be back.